Demand for IT services skyrockets in Saudi Arabia

According to statistics from IDC’s local office, the Kingdom's IT services market will be worth US$ 1 billion by 2006.

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By  Greg Wilson Published  April 16, 2003

Demand for IT services in Saudi Arabia is skyrocketing. According to statistics from IDC’s local office, the Kingdom's IT services market will be worth US$ 1 billion by 2006.

IDC expects regional demand for IT services to grow steadily over the next five years. For example, the UAE's IT services market is expected to reach US $ 300 million by 2006.

“As a result of changing business attitudes, Middle East customers are starting to view IT services as a separate and distinct offering which is leading to heightened competition on the supply side,” says Torben Pedersen, Senior Analyst, IDC Middle East & North Africa.

“Service providers are realising that continuing investments in staff and business processes is a key actor for success in the regional market,” he adds.

IDC research indicates that IT services account for approximately 38% of all IT spending within Saudi Arabia. However, the Kingdom’s impressive service numbers are slightly skewed, due to the sheer volume of big iron hardware within the oil & gas and banking industries.

“Services figures are misleading because of the sheer size of the installed base of the oil & gas sector. Saudi stands out with the size of its services market,” explains Jyoti Lalchandanni, software & consulting, regional director, IDC Middle East.

The local systems integrators are upgrading their in-house skills in order to take a slice of the emerging professional services market. For example, Al Alamiah has been promoting its professional services department since the start of the year.

“The professional services market is maturing rapidly,” says Sami Said, sales director, Al Alamiah. “The services sector is one of the fastest growing in the local market,” he adds.

The Kingdom’s steady migration towards the client/server environment will present all systems integrators with a massive service opportunity.

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